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An Economist's article worths your reading about China RMB.

In my past articles, I have talked about China is taking steps to increase global exposure of RMB and to replace US dollar with a global reserve currency using Special Drawing Rights (ADR).  On July 1st, the IMF already agreed to issue bonds denominated in SDR.  This is a sign that China has its way, especially when two major emerging countries, Russia and India are supporting China. On July 6th, some cross-bothered trade can be settled in China yuan.  Again, although the volume is small but is a step that China wants to make its currency as a global trading currency.  A lot of commentators claimed that China's currency cannot be a global currency replacing US dollar for a long time as the China RMB is not globally traded or liquid enough.  I believe these comments are short-sighted.  They make these comments based on current environment, but in my opinion, China is taking all the small steps to make China RMB as a global trading currency in the future.  Of course, this will not happen within the next few years, but it is entirely possible this could happen within next 10 year.  Remember about GM bankruptcy.  All the bankruptcy experts claimed that GM in no way can be out of bankruptcy within 60 days and President Obama's plan is not realistic.  Now, GM is out of bankruptcy.  Also, when Japanese cars entered into US market in the 1970s, every auto industry also claimed that US needed not worry about Japanese cars as they have the technology and quality.  Now you know what happens.  So, all the comments about why China RMB cannot be a global currency may be proved wrong again in 10 years. Remember how Chinese reaches their goals: slowly but surely.  Chinese don't like to rush things without think it through and test the water first.  China government will move gradually towards its goals.

There is an excellent article in Economist titled "Yuan small step" that worths your reading.